Why equity exposure is critical to achieving financial goals

The couple can accumulate funds for their daughters' weddings. To fund Harshanaa's marriage, they will need Rs 1.16 crore in 15 years, for which they must start a fresh SIP of Rs 30,647 in equity mutual funds every month. Assuming a growth rate of 10% every year, the investment will generate the amount within the likely time horizon.

The couple will need another Rs 1.27 crore in 18 years to fund Rakshika's marriage, for which they need to start a monthly SIP of Rs 23,334 in equity funds. It will add up to Rs 1 crore and Rs 27 lakh can come from their gold investments. Currently, they invest Rs 60,000 every year in Joy Alukkas Gold. Shah suggests that he convert this into an ETF SIP.

The couple will face a shortfall of Rs 4,518 in investing for these goals and taking care of their insurance needs. For the current year, they can rely on Madhus' cash balance, after which, a rise in salary should be able to ensure the required investment. After allocating for all goals, the couple does not have a surplus to increase their EMI payments to reduce the loan tenure. Shah suggests that any windfall gain or bonus should be used to pay off the loan at the earliest.

Financial plan by Charul Shah, Director, Greshma Wealth Advisors

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